PARRIS N. GLENDENING, Governor

Ch. 11

(1)      CLASS A ASSESSMENTS, TO BE USED TO MEET ADMINISTRATIVE
COSTS AND OTHER GENERAL EXPENSES NOT RELATED TO A PARTICULAR
IMPAIRED INSURER OR INSOLVENT INSURER; AND

(2)      CLASS B ASSESSMENTS, TO BE USED TO CARRY OUT THE POWERS
AND DUTIES OF THE CORPORATION WITH RESPECT TO AN IMPAIRED INSURER OR
INSOLVENT INSURER.

(D) AMOUNT.

(1)      (I) THE BOARD SHALL DETERMINE THE AMOUNT OF A CLASS A
ASSESSMENT.

(II)     THE BOARD MAY MAKE A CLASS A ASSESSMENT ON A PRO
RATA OR NONPRO RATA BASIS.

(III)    IF MADE ON A PRO RATA BASIS, THE BOARD MAY PROVIDE
THAT THE ASSESSMENT BE CREDITED AGAINST FUTURE CLASS B ASSESSMENTS.

(IV)    A NONPRO RATA ASSESSMENT MAY NOT EXCEED THE
AMOUNT PROVIDED IN THE CORPORATION'S PLAN OF OPERATION PER MEMBER
INSURER IN 1 CALENDAR YEAR.

(V)     THE AMOUNT OF A CLASS B ASSESSMENT SHALL BE
ALLOCATED FOR ASSESSMENT PURPOSES AMONG THE ACCOUNTS ACCORDING TO
AN ALLOCATION FORMULA THAT IS BASED ON:

1.        THE PREMIUMS OR RESERVES OF THE IMPAIRED
INSURER OR INSOLVENT INSURER; OR

2.        ON ANOTHER STANDARD THAT THE BOARD CONSIDERS
IN ITS SOLE DISCRETION TO BE FAIR AND REASONABLE UNDER THE
CIRCUMSTANCES.

(2)      THE BOARD SHALL MAKE CLASS B ASSESSMENTS AGAINST MEMBER
INSURERS FOR EACH ACCOUNT IN THE PROPORTION THAT THE AMOUNT OF
PREMIUMS RECEIVED ON BUSINESS IN THE STATE BY EACH ASSESSED MEMBER
INSURER ON POLICIES OR CONTRACTS COVERED BY EACH ACCOUNT FOR THE MOST
RECENT CALENDAR YEAR FOR WHICH INFORMATION IS AVAILABLE PRECEDING
THE YEAR IN WHICH THE INSURER BECAME IMPAIRED OR INSOLVENT, BEARS TO
THE AMOUNT OF PREMIUMS RECEIVED ON BUSINESS IN THE STATE FOR THOSE
CALENDAR YEARS BY ALL ASSESSED MEMBER INSURERS.

(3)      THE BOARD MAY ASSESS MEMBER INSURERS ON A NONPRO RATA
BASIS WITHOUT REGARD TO PARAGRAPH (2) OF THIS SUBSECTION IF THE AMOUNT
OF A CLASS B ASSESSMENT REPRESENTING THE AGGREGATE LIABILITY OF THE
CORPORATION FOR A SINGLE IMPAIRMENT OR INSOLVENCY IS NOT GREATER THAN
THE CLASS A ASSESSMENT IN THE SAME CALENDAR YEAR AGAINST AUTHORIZED
INSURERS IN THE SAME LINE OF BUSINESS AS THE LIABILITY FOR THE IMPAIRED
INSURER OR INSOLVENT INSURER.

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